IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

APPA Seafood, Inc., :

Plaintiff, :

v. : Case No. 2:12-CV-1095

 : 

Obetz Transportation, Inc., MAGISTRATE JUDGE KEMP

et al., :

Defendants.

 

OPINION AND ORDER

This matter is before the Court on a motion for summary

judgment on all counts filed by Defendant Devinder Singh d/b/a

McKee Transport (“McKee”) (Doc. #42) and a cross-motion for

partial summary judgment filed by Plaintiff APPA Seafood, Inc.

d/b/a APPA Fine Foods (“APPA”) (Doc. #50). For the reasons set

forth below, McKee’s motion for summary judgment will be granted,

and APPA’s cross-motion for partial summary judgment will be

denied.

I. Background

This is a motor carrier case relating to the shipment of

food. APPA, a food distributor, claims that a shipment of

chicken was not kept at the proper temperature during transport

and, consequently, it had to be destroyed. APPA sued McKee and

Obetz Transportation, Inc. (“Obetz”) to recover for the loss of

the shipment, claiming that they were responsible for the proper

shipment of the goods from Denison, Iowa to Corona, California. 

More specifically, in an amended complaint filed on November 13,

2013, APPA alleges that it engaged Fire & Ice Transport, Inc.

(“Fire & Ice”) as a motor carrier to transport the chicken and

that Fire & Ice brokered the load to McKee, as motor carrier or a

surface freight forwarder, without its knowledge. APPA alleges

that McKee then “re-brokered the load” to Obetz, as a motor

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carrier, again without its knowledge. (Doc. #39 at ¶18). 

According to APPA

The Goods were picked up in good condition on or about

May 25, 2012 in Denison, Iowa, at minus ten degrees 

(-10E) Fahrenheit. APPA notified the driver that the

equipment for his refrigerated trailer, which held the

Goods, must be kept at minus ten degrees (-10E)

Fahrenheit. In addition, McKee and Fire & Ice had

documents, which they shared with Obetz about APPA’s

refrigeration requirements. The driver signed the Bill

of Lading (the “BOL”) governing the carriage of the Goods

on May 25, 2012. On or about May 29, 2012, the Goods

arrived at APPA’s facility in Corona, California, at a

temperature of 49.1 degrees Fahrenheit. The Goods were

rejected at delivery.

Id. at ¶¶20-23. APPA claims that damages arising from the lost

load are in excess of $100,253.90.

In its amended complaint, APPA brings one claim against both

McKee and Obetz and three claims solely against McKee. APPA does

not name Fire & Ice as a defendant in the amended complaint. In

count one, APPA alleges that McKee and Obetz are liable under the

Carmack Amendment, 49 U.S.C. §14706, for their failure to deliver

the load in good condition. In count two, APPA alleges that

McKee entered into a contract to transport and/or to arrange to

transport the goods and that McKee breached its obligations under

the contract, resulting in damages. In count three, APPA alleges

that McKee entered into an implied contract to transport the

goods and/or to arrange to transport the goods and that McKee

breached the implied contract, resulting in damages. Finally, in

count four, APPA asserts a negligence claim against McKee,

alleging that it breached its duty to properly transport and/or

properly arrange for transport of APPA’s goods, which proximately

caused APPA to suffer damages.

McKee denies liability and has moved for summary judgment on

all of APPA’s claims (Doc. #42). APPA filed a response in

opposition to McKee’s motion for summary judgment (Doc. #49), in

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addition to filing a cross-motion for partial summary judgment on

its Carmack Amendment claim against McKee (Doc. #50). McKee

filed a combined reply in its support of its motion and

memorandum in opposition to the cross-motion for partial summary

judgment (Doc. #54). Finally, APPA filed a reply in support of

its cross-motion for partial summary judgment (Doc. #55). Thus,

the motions have been briefed fully, and they are now ripe for

review.

II. Motion for Summary Judgment Standard

Summary judgment is not a substitute for a trial when facts

material to the Court’s ultimate resolution of the case are in

dispute. It may be rendered only when appropriate evidentiary

materials, as described in Fed.R.Civ.P. 56(c), demonstrate the

absence of a material factual dispute and the moving party is

entitled to judgment as a matter of law. Poller v. Columbia

Broadcasting Systems, Inc., 368 U.S. 464 (1962). The moving

party bears the burden of demonstrating that no material facts

are in dispute, and the evidence submitted must be viewed in the

light most favorable to the nonmoving party. Adickes v. S.H.

Kress & Co., 398 U.S. 144 (1970). Additionally, the Court must

draw all reasonable inferences from that evidence in favor of the

nonmoving party. United States v. Diebold, Inc., 369 U.S. 654

(1962). The nonmoving party does have the burden, however, after

completion of sufficient discovery, to submit evidence in support

of any material element of a claim or defense on which that party

would bear the burden of proof at trial, even if the moving party

has not submitted evidence to negate the existence of that

material fact. See Celotex Corp. v. Catrett, 477 U.S. 317

(1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986). Of

course, since “a party seeking summary judgment . . . bears the

initial responsibility of informing the district court of the

basis for its motion, and identifying those portions of [the

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record] which it believes demonstrate the absence of a genuine

issue of material fact,” Celotex, 477 U.S. at 323, the

responding party is only required to respond to those issues

clearly identified by the moving party as being subject to the

motion. It is with these standards in mind that the instant

motions must be decided.

III. Discussion

The Court first examines APPA’s claim arising under the

Carmack Amendment. After doing so, the Court next examines

APPA’s state law claims for breach of contract, breach of implied

contract, and negligence.

A. Carmack Amendment Claim

Count one of APPA’s amended complaint arises under the

Carmack Amendment to the Interstate Commerce Commission Act, 49

U.S.C. §14706, which establishes the obligations of interstate

motor carriers. The Supreme Court has described the Carmack

Amendment as follows

[T]he statute codifies the common-law rule that a

carrier, though not an absolute insurer, is liable for

damage to goods transported by it unless it can show that

the damage was caused by (a) the act of God; (b) the

public enemy; (c) the shipper himself; (d) public

authority; (e) or the inherent vice or nature of the

goods.

Missouri Pac. R.R. Co. v. Elmore and Stahl, 377 U.S. 134, 138

(1964)(internal quotations omitted). A plaintiff sets forth a

prima facie case under the Carmack Amendment when it demonstrates

delivery of the cargo to the carrier in good condition, arrival

of the cargo in damaged condition, and damages. Plough, Inc. v.

Mason and Dixon Lines, 630 F.2d 468, 470 (6th Cir. 1980); see

also Great West Casualty Co. v. Flandrich, 605 F. Supp. 2d 955,

966 (S.D. Ohio 2009) (setting forth the prima facie elements of a

Carmack Amendment claim). Once the shipper has set forth a prima

facie case, “the burden of proof is upon the carrier to show both

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that it was free from negligence and that the damage to the cargo

was due to one of the excepted causes relieving the carrier of

liability.” Id.

In its motion for summary judgment, McKee argues that APPA

cannot set forth a prima facie case under the Carmack Amendment

because it never accepted custody of the cargo. McKee admits

that it entered into a contract with Fire & Ice related to the

transport captioned “Freight Forwarder – Contract Carrier –

Contract,” dated May 25, 2012. However, McKee claims that

“shortly later, [it] discovered that its refrigeration equipment

was not performing adequately, and it immediately advised . . .

Fire & Ice that would not be able to transport the shipment.” 

(Doc. #42 at 5). McKee alleges that it

advised Fire & Ice that another company named defendant

Obetz might have a truck available in the area of

Denison, Iowa. [McKee]’s owner, Devinder Singh, knew the

owner of defendant Obetz and he contacted defendant Obetz

to see if they had availability. Mr. Singh advised Fire

& Ice to contact defendant Obetz directly to make

arrangements.

Id. at 6. McKee maintains that Devinder Singh did not hire or

retain Obetz. Indeed, it claims that “[a]fter putting the two in

touch with one another, [Mr. Singh] had no further involvement in

the shipment.” Id. Based upon these facts, McKee argues that it

cannot be liable to APPA under the Carmack Amendment.

In its cross-motion, APPA does not dispute that McKee was

unable to transport the load due to a refrigeration unit

breakdown. According to APPA, however, liability under the

Carmack Amendment extends beyond the motor carrier which actually

provides the transportation, and makes any carrier that provides

a service related to the transportation liable. In this case,

APPA argues that McKee is liable under the Carmack Amendment

because it “made the arrangements . . . by making telephone

calls, passing along information, and booking the load” to be

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transported by Obetz. (Doc. #49 at 4). Based upon these facts,

APPA argues that reasonable minds can find that McKee acted as a

motor carrier with respect to APPA’s goods. 

In response, McKee argues that APPA is “playing fast and

loose with the facts” in arguing that McKee arranged for

transportation of the cargo. (Doc. #54 at 2). According to

McKee, it advised Fire & Ice “that it must itself directly secure

the services of another motor carrier, which it did both verbally

and through the issuance of a bill of lading and exchange of a

rate confirmation, neither of which reference [McKee] in any

manner whatsoever.” Id. (internal citations omitted). McKee

further alleges that, consistent with these facts, it did not

issue an invoice or receive any compensation. Consequently,

McKee argues that “there can be no serious dispute that the

original transportation agreement was terminated and substituted

with an entirely new transaction between [APPA], through its

agent Fire & Ice and defendant Obetz.” Id. 

In reply, APPA argues that the following is without dispute

“(1) Defendant McKee contracted to transport APPA’s Goods; (2) it

was provided all documents for such transport, including the

Dispatch Rate/Confirmation Agreement; and (3) when it was unable

to transport the Goods, Defendant McKee took action right away

and told Fire & Ice that Obetz Transportation could do it.” 

(Doc. #55 at 1-2)(internal quotations omitted). Consequently,

APPA argues that, “[r]eviewing all of the facts and evidence,

reasonable minds can only conclude that Defendant McKee provided

transportation or service with respect to APPA’s Goods, and

therefore, it should be held liable under the Carmack Amendment

as a matter of law.” Id. at 2 (internal quotations omitted). 

Most of the facts relevant to this claim are not in dispute. 

In particular, there is no dispute that McKee agreed to transport

the load but was unable to do so due to a refrigeration equipment

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failure. There is likewise no dispute that McKee contacted Obetz

to inquire as to whether Obetz could transport the load once

McKee realized that it was unable to do so. Further, there is no

dispute that, thereafter, Fire & Ice issued a written “Dispatch

Confirmation/Rate Agreement” to Obetz, and that APPA issued a

bill of lading naming Obetz as the motor carrier. The parties do

not dispute that Obetz transported the goods, which were rejected

upon delivery. The disagreement between APPA and McKee pertains

to what involvement, if any, McKee had with the transportation of

the goods beyond its initial telephone call to Obetz. 

APPA is correct that liability under the Carmack Amendment

may extend beyond the carrier which physically transported the

goods. Pursuant to the statute, a “motor carrier” is a “person

providing motor vehicle transportation for compensation.” 49

U.S.C. §13102(14). “Transportation” is defined to include, inter

alia, “services related to that movement, including arranging

for, receipt, delivery, elevation, transfer in transit,

refrigeration, icing, ventilation, storage, handling, packing,

unpacking, and interchange of passengers and property.” Id. at

§13102(23)(B). See, e.g., Land O’Lakes, Inc. v. Superior Serv.

Transp. of Wis., Inc., 500 F. Supp. 2d 1150, 1155 (E.D. Wisc.

2007) (finding defendant was a “motor carrier” under the Carmack

Amendment despite the fact that defendant did not physically

transport and goods and arranged for another entity to broker the

transport). Thus, McKee did not need to ship the goods in this

case in order to be subject to potential liability under the

Carmack Amendment. 

Merely because McKee may be liable under the Carmack

Amendment, however, does not mean that APPA has demonstrated the

absence of a genuine issue of material fact as to this claim. 

Indeed, in this case, the totality of the evidence does not lead

to a reasonable inference that McKee could be liable for its

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actions under the Carmack Amendment. Mr. Singh testified in his

deposition that he called Amir Ullah of Obetz to see if that

company would be able to make the transport. He testified that

he instructed Obetz to engage in negotiations with Fire & Ice

independent of him, and that McKee had no further involvement. 

Consistent with Mr. Singh’s contention that McKee had no further

involvement, Fire & Ice issued a written “Dispatch

Confirmation/Rate Agreement” to Obetz, and APPA issued a bill of

lading naming Obetz as the motor carrier.

APPA’s offers little evidence that McKee should be subject

to liability. In a footnote in its memorandum in opposition to

McKee’s motion for summary judgment, APPA states that, in

addition to McKee’s own Dispatch Rate/Confirmation Agreement with

Fire & Ice, “McKee had in its possession, and produced in

discovery, another Dispatch Rate/Confirmation Agreement” which

“had Defendant Obetz’s name instead of defendant McKee.” (Doc.

#49 n.1). APPA also argues that

[a]fter the Goods were rejected by APPA, the evidence

supports that Defendant McKee played a role in moving the

Goods to a U.S. Cold Storage Facility in Bakersfield,

California – the same city where Defendant McKee is

located. The individual in charge at U.S. Cold Storage

Facility is Frank Garcia. Although Defendant McKee’s

owner failed to acknowledge any involvement with

Plaintiff’s load after it was rejected, in discovery,

Defendant McKee produced a document from its file that

contains a handwritten name ‘Frank’ next to Defendant

McKee’s fax number.

Id. at 5. This evidence alone, in light of all of the other

evidence in the record, would not allow a trier of fact

reasonably to infer that McKee arranged for the transport of the

goods by Obetz and, consequently, that it would be subject to

liability under the Carmack Amendment. 

Further, the Court has considered the authority cited by

APPA in support of its position and finds the cases to be

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factually distinguishable from this case. See, e.g., Land-OLakes, Inc., 500 F. Supp. 2d at 1155 (finding Carmack Amendment

applicable where, pursuant to a contract, defendant arranged for

another party to broker the load to the trucking company which

transported the goods); Mach Mold, Inc. v. Clover Assoc. Inc.,

383 F. Supp. 2d 1015 (N.D. Ill. 2005) (holding Carmack Amendment

was applicable where plaintiff authorized defendant to ship the

machine, and that defendant did so by contracting with another

party to help); Advantage Freight Network v. Sanchez, No. CV-F07-827-LJO-SMS, 2008 U.S. Dist. LEXIS 81816 (E.D. Cal. Sept. 10,

2008)(determining that the Carmack Amendment was applicable where

defendant agreed to transport the goods and arranged for their

transportation through his driver). As McKee argues, “the cases

relied upon by plaintiff are misplaced, as they rely on fact

patterns where a motor carrier accepted responsibility for a

shipment and simply sub contracted its own work responsibilities

– an altogether different situation.” (Doc. #54 at 6). Based on

the foregoing, the Court will grant McKee’s motion for summary

judgment on the Carmack Amendment claim and will deny APPA’s

cross-motion for partial summary judgment on the same claim. 

B. State Law Claims

The Court now turns to APPA’s state law claims for breach of

contract, breach of implied contract, and negligence. In count

two of the amended complaint, APPA alleges that “[i]n the event

McKee is found not to be a carrier, it should be found to be a

broker with respect to the Shipment of Goods.” (Doc. #39 at

¶38). APPA states that it was the intended beneficiary of the

contract pertaining to the transport of the goods and,

consequently, McKee is liable to it for breaching its obligations

as a broker under the contract. McKee argues that it is entitled

to summary judgment on this claim because “not only is there (1)

no basis in fact or law to suggest McKee Transport was ever a

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freight broker, but (2) there was never any contractual

relationship or proximate causation, in any event.” (Doc. #42 at

11).

In count three of the amended complaint, APPA alleges that

McKee is liable to it for breaching its obligations as a broker

under an implied contract intended to benefit APPA. In response,

McKee argues again that it “clearly never acted in the capacity

of a freight broker.” Id. at 14. McKee also contends that “this

claim is barred as a matter of law by (1) federal preemption,

both implied and express, and (2) even if it were not preempted,

there is no basis under Ohio law to sustain a claim for breach of

implied contract” under the facts presented in this case. Id. 

In count four of the amended complaint, APPA alleges that

McKee breached its duties as a broker by failing properly to

transport and/or arrange for the transportation of the goods. 

APPA further alleges that McKee’s negligence proximately caused

the destruction of APPA’s goods, resulting in damages believed to

be in excess of $100,253.90. McKee again argues that this claim

is barred by preemption. Alternatively, McKee contends that,

even if this claim is not preempted, it “fails on all essential

elements as a matter of law.” (Doc. #42 at 18). More

specifically, McKee argues that even if it “acted as a broker,

then there is still no factual basis upon which to support a

common law claim for negligence because [it] cannot be held

liable for the negligence of defendant Obetz in failing to

maintain the desired temperature.” Id.

In its memorandum in opposition to McKee’s motion for

summary judgment, APPA does not dispute that the Carmack

Amendment preempts state law claims that fall within the scope of

that statute. However, APPA argues that “if Defendant McKee is

deemed a broker, APPA’s state law claims fall outside the scope

of the Carmack Amendment and, therefore, are not subject to

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federal preemption.” (Doc. #49 at 12). APPA also argues that it

has enforceable rights under the contract between Fire & Ice and

McKee, despite the fact that it is not named in the contract. 

For purposes of resolving McKee’s motion for summary

judgment, even if the Court assumes for the sake of argument,

without deciding, that APPA’s claims are not preempted and that

APPA had enforceable rights under the contract, McKee would still

be entitled to summary judgment on APPA’s claims for breach of

contract, implied breach of contract, and negligence. Simply

stated, APPA fails to set forth facts to support its state law

claims for relief. Although Fire & Ice and McKee had a written

contract for McKee to transport APPA’s goods, the evidence

permits only one inference – that those parties mutually agreed

to terminate that contract when McKee was unable to perform. 

Thus, the evidence supports a finding of mutual rescission or

abandonment, followed by Fire & Ice’s creating a new contract

with Obetz. See, e.g., Nebco & Assoc., 23 Cl. Ct. 635, 642

(1991)(observing that parties may mutually agree to rescind a

contract by conduct which indicates intent by both parties to

abandon the contract)(citing Restatement (Second) of Contracts

§283, comment a). Furthermore, the plain language of the

contract between Fire & Ice and McKee placed McKee in the

position of a carrier, and it did not allow McKee to arrange for

transportation of the goods without prior written consent. (Doc.

#50, Ex. 2 at ¶12). APPA fails to set forth any argument or

evidence suggesting that Fire & Ice provided such written

consent. Because the totality of the evidence does not support a

reasonable inference that McKee either had a contract to

transport the goods which survived the new arrangement made with

Obetz or that it owed any duty to APPA which could lead to tort

liability, McKee’s motion for summary judgment on these claims

will be granted.

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IV. Conclusion

 For the reasons set forth above, McKee’s motion for summary

judgment is granted (Doc. #42) and APPA’s cross-motion for

partial summary judgment is denied (Doc. #50).

IT IS SO ORDERED. 

 /s/ Terence P. Kemp 

 United States Magistrate Judge

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